Hacking is an occasional occurrence in the cryptocurrency market which has been going up recently, with the latest one being Harmony protocol’s Horizon Bridge.
The team put out notices informing users and the community about the hack and promised to take the necessary options as soon as possible. This hack, followed by Axie Infiniti’s Ronin Bridge hack that drained assets worth around $622 million is the fourth such event this year.
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Harmony and the Horizon Bridge
Founded by Stephen Tse in 2018, Harmony is one of the most popular cryptocurrencies that had grown tremendously during the recent bull market. The protocol is an interoperable sharding system that employs a two-way Ethereum bridge.
As a layer-2 solution for Ethereum, the Harmony blockchain is an independent blockchain-powered by Harmony One tokens (ONE). By enabling frictionless cross-chain token swaps, Harmony makes it easy for developers to build and scale artistic and innovative decentralized applications or dApps.
Using Horizon you can exchange cryptocurrencies or Next Generation Tokens (NFTs) between the Harmony, Ethereum, or Binance Smart Chain blockchains.
Harmony’s main purpose is to facilitate the transfer of assets from Ethereum to Harmony. A Harmony user can move assets from Ethereum or Binance Smart Chain to Ethereum, and vice versa. One can redeem the exchanged assets through Horizon at any time into their Ethereum or Binance Smart Chain.
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About the Hack
Information regarding the hack was first announced by Harmony in a tweet on Friday. The Twitterati quickly picked up on this and the news immediately garnered a lot of attention. The hacker had apparently found a vulnerability in the bridge. Since these protocols are built with written code as their underlying infrastructure, hackers have a higher possibility of exploiting any bugs or errors.
The tweet posted by Harmony’s Twitter handle mentioned that the address used by the culprit was immediately found. Assets that were stolen include cryptocurrencies like SUSHI, AAVE, USDT, DAI and USDC. The hacker had quickly swapped all of these tokens in exchange for Ethereum. This is a common course of action followed by several crypto hackers and has been observed in the past events like this too.
Keeping in mind the magnitude of the hack, Harmony stated to have mentioned other exchanges while momentarily halting transactions on the Horizon bridge. However, they claimed that the hack does not; in any way affect the trustless BTC bridge and that the funds and assets stored in decentralized vaults currently are completely safe.
While this seemed to have brought some sort of peace of mind to many users, a huge chunk of the community displayed their doubts and anger on Twitter.
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Harmony has teamed up with national authorities like the FBI and forensic specialists to track the culprit quickly and efficiently, according to their tweet. The entire fiasco resulted in the price of Harmony’s native token ONE to dump by over 10% in an already suffering market condition. At the time of writing, ONE is trading in the $0.025 levels.
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